Another year is nearly here! December is usually the time we plan ahead, set goals and resolutions, and maybe even consider taking the leap into something new.
Depending where you’re at on your entrepreneurial journey, this might mean launching a new business, hiring your first employee, expanding your product or service offering, or looking at your numbers and delving into some financial forecasting.
Below are some of our top tips for succeeding in your current or soon to be business in 2023, and beyond.
Three considerations before you launch
Going out on your own can be daunting and even a little overwhelming, however if you get your systems and processes in place from the very beginning, you’ll be in good standing.
Some important steps to take include:
- Know your acronyms. Make sure you’ve got an ABN, and register for GST if you think you’ll earn over $75,000 a year. You can always action this later, but be sure to keep track of your earnings and apply when you’re close to the threshold.
Once you’re registered for GST, know that you’ll need to submit regularBusiness Activity Statements (BAS) – this will be quarterly for most of you.
- Bank accounts. It’s really important to set up a separate bank account for your business. Separate business and personal accounts will make it much easier for you to track your incomings and outgoings, and gain an understanding of the true state of your numbers. You can check out our top recommendations here.
- Pricing. It can be easy to undercharge when you’re starting out, because you simply want to get clients in the door or sell your products, so that you can pay the bills.
However, it’s very difficult to increase prices once you’ve decided on them. So, aim to follow a proven formula here that accounts for all of your overheads, and includes a suitable profit margin.
Ways to nail your numbers if you’re already operating
There’s no denying that running a small business can be challenging, especially in the first few years. In addition to the work you know and love, there are things like financials, operations, marketing, strategy and HR to manage.
However, now’s the time so get everything in order! Our top recommendations here include:
- Leverage tech. Say goodbye to the humble spreadsheet and hello to bookkeeping software. It’s affordable and user-friendly, updates in real time so you can see how you’re performing, and allows you to complete actions like capturing receipts and invoices on the go, so they are never lost.
- Reconcile. While it can be difficult to find the time in the day to do this, aim to put an afternoon aside each week, fortnight or month to manage your reconciliations.
By analysing how and whether your bank statement matches your incomings and outgoings, you’ll be able to chase unpaid invoices, and ensure you’ve paid employees and suppliers on time – which is so key to maintaining positive working relationships. This process will also allow you to see how much profit you’re truly making.
- Outsource. If you’re finding managing your numbers a challenge, know that it’s ok to outsource this service. Bookkeeping services dedicated to small business owners are very affordable these days, and the time you get back in your day will be priceless.
Ready to turn things up a notch? Financial strategy is where it’s at
If your biz is tracking well and you want to continue on this trajectory, yet aren’t sure how or where to start, it’s all in the numbers strategy.
Before you make any big investment, whether that’s in additional staff or inventory, it’s important to ensure you’ve got the cash to afford it, and having a robust plan in place will ensure that you make informed decisions in this area.
This is where the budget and cash flow forecast have an important role to play:
- Creating your budget. As you’re already in business, we recommend creating this on an annual basis, so that you can really plan ahead. The best way to set this, is to look at your historical data, as this will give you a clear picture of your incomings and outgoings.
Then plug everything, and I mean everything, into your budget, and organise it by category (most bookkeeping software tools will do this for you automatically).
- The role of the cash flow forecast. While your budget and cash flow forecast are linked, it’s important to know that they are separate entities.
Your forecast accounts for everything you’ve put into your budget, however it will include your actual incomings and outgoings, instead of what you think they’ll be based on your budget.This means it’s important to update it ideally weekly, as this will help you identify any areas of overspending – and allow you to explore ways to reduce costs, as well as underspending – so that you can potentially allocate these funds into other areas of the business.
- Seek expert advice. If you want to get off on the right foot in the new year, it’s always worth looking to a numbers expert to provide strategic advice and support.
They can help you create your budget and cash flow forecast based on your goals and the unique nature of your business, and then support you throughout the year so that you’re on track, and can continue to grow.
Whether you’re planning on going out on your own, looking to get on top of your numbers, or grow even more in 2023, get in touch with our team today.